{"id":609139,"date":"2019-03-01T18:19:55","date_gmt":"2019-03-01T23:19:55","guid":{"rendered":"https:\/\/www.riverbendadvisors.com\/blog\/?p=609139"},"modified":"2019-03-01T18:21:24","modified_gmt":"2019-03-01T23:21:24","slug":"cfa-institute-positions-on-esg-integration","status":"publish","type":"post","link":"https:\/\/www.riverbendadvisors.com\/blog\/2019\/03\/cfa-institute-positions-on-esg-integration\/","title":{"rendered":"CFA Institute Positions on ESG integration &#8211; &#8220;Welcome back to the fight.  This time I know our side will win.&#8221;"},"content":{"rendered":"<p>As a sustainable investing professional and a proud CFA charterholder, I have been actively advocating  that ESG information is material and that considering it is absolutely consistent with CFA charterholders&#8217; professional responsibilities and CFA Institute&#8217;s mission.  So the January 10th publication of the CFA Institute&#8217;s &#8220;<a href=\"https:\/\/www.cfainstitute.org\/en\/advocacy\/policy-positions\/positions-on-environmental-social-governance-integration\" rel=\"noopener\" target=\"_blank\">Positions on Environmental, Social and Governance Integration<\/a>&#8221; was a important &#8211; and satisfying &#8211; milestone.  <\/p>\n<p><a href=\"https:\/\/www.cfainstitute.org\/-\/media\/documents\/article\/position-paper\/cfa-institute-position-statement-esg.ashx\" rel=\"noopener\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.riverbendadvisors.com\/blog\/wp-content\/uploads\/2019\/02\/CFAi-ESG-Integration-position-image-118x150.png\" alt=\"\" width=\"118\" height=\"150\" class=\"alignright size-thumbnail wp-image-609152\" srcset=\"https:\/\/www.riverbendadvisors.com\/blog\/wp-content\/uploads\/2019\/02\/CFAi-ESG-Integration-position-image-118x150.png 118w, https:\/\/www.riverbendadvisors.com\/blog\/wp-content\/uploads\/2019\/02\/CFAi-ESG-Integration-position-image-236x300.png 236w, https:\/\/www.riverbendadvisors.com\/blog\/wp-content\/uploads\/2019\/02\/CFAi-ESG-Integration-position-image.png 460w\" sizes=\"auto, (max-width: 118px) 100vw, 118px\" \/><\/a><\/p>\n<p>The policy statement unequivocally welcomes the consideration of  environmental, social and governance issues &#8211; the foundation of sustainable investing &#8211; into the work of CFA charterholders.  Indeed, it makes clear that these issues should be a part of their professional practice.  <\/p>\n<p>The &#8220;top-line views&#8221; that make up the policy statement map seamlessly to fundamental arguments I use when making the case for sustainable investing in purely mainstream, traditional finance terms.  Using the short form of the arguments and the full text of the policy points, it looks like this: <\/p>\n<ul>\n<li><b class=\"c\">ESG information is material and therefore useful in investment decision making<\/b>\n<p class=\"inset\" style=\"margin-top: 0.5em;\">\nCFA Institute Standards of Professional Conduct require CFA\u00ae charterholders to conduct appropriate research and investigation of all material information relevant to their investment analyses and portfolio management decisions, recommendations, or actions.\n<\/p>\n<p class=\"inset\" style=\"margin-top: 0.5em;\">\nCFA Institute believes this requirement includes the consideration of material ESG information\/considerations (ESG factoring) as an important component of a complete and thorough financial analysis for any actively managed fundamental investment portfolio.\n<\/p>\n<\/li>\n<li><b class=\"c\">ESG is applicable across the investment spectrum<\/b>\n<p class=\"inset\">\nMore broadly, CFA Institute encourages all investment professionals to consider ESG factors, where relevant, as an important part of the analytical and investment decision-making process, regardless of investment style, asset class, or investment approach.\n<\/p>\n<\/li>\n<li><b class=\"c\">Investment professionals need information about ESG<\/b>\n<p class=\"inset\">\nCFA Institute is strongly focused on developing ESG-focused curricula and educational tools for our members and CFA\u00ae Program candidates, as well as for the broader investment management industry.\n<\/p>\n<\/li>\n<li><b class=\"c\">Use of ESG information is consistent with fiduciary duty<\/b>\n<p class=\"inset\">\nESG factoring is consistent with a manager\u2019s fiduciary duty to consider all relevant information and material risks in investment analysis and decision making.\n<\/p>\n<\/li>\n<\/ul>\n<p>To be credible, it is essential to also recognize and acknowledge the challenges to the wider use and integration of ESG information into investment analysis.  So I appreciate the fact that the policy statement discusses two of those challenges.    <\/p>\n<ul>\n<li><b class=\"c\">We have significant and important work to do improving ESG data and disclosures<\/b>\n<p class=\"inset\">\nESG disclosures and data being provided by corporate issuers, sometimes referred to as sustainability reporting, require further standardization and refinement to improve the quality, consistency, and comparability of key ESG factors across industry sectors.\n<\/p>\n<\/li>\n<li><b class=\"c\">Truth in labeling &#8211; the quality and integrity of our work is non-negotiable<\/b>\n<p class=\"inset\">\nESG investment products \u2014 and management services marketed as such \u2014 must include adequate and detailed disclosures explaining the specific ESG process being used, with periodic verification that the stated ESG process, analytics, and factoring are occurring.\n<\/p>\n<\/li>\n<\/ul>\n<p>Just as the audience watching Casablanca knew that Humphrey Bogart really was on the right side all along, I have always been confident that CFA Institute would eventually recognize that the fundamental things really do apply. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>As a sustainable investing professional and a proud CFA charterholder, I have been actively advocating that ESG information is material and that considering it is absolutely consistent with CFA charterholders&#8217; professional responsibilities and CFA Institute&#8217;s mission. So the January 10th<\/p>\n","protected":false},"author":1,"featured_media":609152,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[99],"tags":[],"class_list":["post-609139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sustainable-investing","","tg-column-two"],"_links":{"self":[{"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/609139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=609139"}],"version-history":[{"count":29,"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/609139\/revisions"}],"predecessor-version":[{"id":609169,"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/609139\/revisions\/609169"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/media\/609152"}],"wp:attachment":[{"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=609139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=609139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.riverbendadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=609139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}